Ingevity Corporation Common Stock

Greetings and welcome to Ingevity's fourth quarter and year-end earnings webcast and conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jack Maher, Senior Vice President, Public Affairs and Investor Relations. Please go ahead, sir.

Thank you, Brock. Good morning, everyone. Welcome to Ingevity's fourth quarter and full year 2020 earnings conference call. Earlier this morning, we posted a presentation onto the investors section of our website. If you haven't already done so, I would encourage you to download this file so you can follow along during the call. You can find it by visiting ir.engevity.com under Events and Presentations. For participants who are logged into our webcast, the slides should be visible in the online viewing pane and also available to download. On slide number two of that deck, you'll see our disclaimer that today's earnings call may contain forward-looking statements. Relevant factors that could cause actual results to differ materially from these forward-looking statements are contained in our earnings release and in our SEC filings, including our Form 10-K and our most recent Form 10-Q. Injevity undertakes no obligation to publicly release any revision to the projections and forward-looking statements made during this call or to up-reflect events or circumstances occurring after the date of this call. Throughout this call, we may refer to non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP measures. Definitions of these non-GAAP financial measures and reconciliations to comparable GAAP financial measures are included in our earnings release and can be found on the investor relations section of our website. Our agenda is on slide three. With me today are John Fortson, President and CEO and interim CFO, Mike Smith, President of Performance Chemicals, Ed Woodcock, President of Performance Materials, Eric Ripple, Chief Growth and Innovation Officer, and Bill Hamilton, Vice President, Financial Planning and Analysis and Treasurer. First, John will comment on the highlights of the quarter and full year. Mike and Ed will review the performance of our two segments. John will review some key accomplishments in 2020 and discuss our Ingevity 2.0 strategy. Eric will provide an update on some focus areas for growth and innovation. Phil will comment on our current financial status. Lastly, John will review our 2021 outlook and guidance. With that, I'll turn the call over to our CEO, John Fortson.

Thanks, Jack, and good morning, everyone. Thank you for joining us. We appreciate your continued interest in Ingevity. If you turn to slide four, you'll note some highlights for the quarter. Overall, we delivered excellent fourth quarter and full year results. Our businesses were resilient despite challenging conditions. Revenues in the fourth quarter were $326 million, up 7% when compared to the previous year's quarter, despite the continued economic impacts of COVID-19. Vengevity's fourth quarter results were driven by strong automotive production and sales in China, and a highly favorable truck and SUV ship in the U.S. and Canada. We also benefited from increases in sales for engineered polymers and slight growth in North American paving sales. These positives were partially offset by reduced revenues in the oil field and printing markets and international paving sales, all of which were highly affected by the COVID weakened economic environment. With respect to earnings, adjusted EBITDA were $111 million, up almost 22% from the previous year's quarter. We continue to benefit from the mid-year cost reduction actions that we put in place. Our margins are holding up well across the board, and as a result, our adjusted EBITDA margin for the fourth quarter rose to 34%, which is a fourth quarter record. For the quarter, we generated a low of $122 million due to our strong operating performance and excellent work in capital management. This enabled us to reduce our leverage to 2.45 times, which returns us to our targeted range of between two and two and a half times. I want to thank everyone on the Ingevity team for all their work over the last year as we navigated the ups and downs in both of our segments, especially our manufacturing employees. They have figured out how to work productively despite the constraints of operating in a COVID-safe environment. Our performance this quarter is a testament to the efforts of these employees across the company.